China’s economy probably grew the least in 10 quarters in the last three months of 2011 and may cool further as export demand slumps and officials prolong a campaign against property bubbles.
Gross domestic product, the value of all goods and services produced, rose 8.7 percent from a year earlier, the slowest pace since the second quarter of 2009, according to the median forecast of 26 economists surveyed by Bloomberg News. The data, and indicators for investment, retail sales and industrial production, are scheduled for release tomorrow in Beijing.
The fourth straight quarterly slowdown in the world’s second-largest economy adds to concerns that global expansion is faltering, with the International Monetary Fund warning of near- zero growth in Europe and a “substantial” cut to its global forecast. China’s exports rose the least in two years in December and inflation eased to a 15-month low, bolstering the case for Premier Wen Jiabao to loosen policies.
“The worst is yet to come and more easing measures will be in the pipeline in coming months,” said Zhang Zhiwei, Hong Kong-based chief China economist at Nomura Holdings Inc., who previously worked at the IMF. “Increasing downside risks in China will hurt the outlook for other economies especially commodities exporters such as Australia and Brazil.”
Growth may “trough” at 7.5 percent in the three months through March and 7.6 percent in the second quarter, Zhang said. That may prompt the central bank to “front-load” policy easing into the first half, with one interest-rate cut in March and three reductions to banks’ reserve requirement ratios, he said.
Worsening Crisis
Asian stocks dropped ahead of a debt sale today by France after Standard & Poor’s stripped the country of its top rating and cut eight other European nations, stoking concern the region’s debt crisis may worsen. The MSCI Asia Pacific Index (MXAP) fell 1.3 percent as of 3:50 p.m. in Tokyo. The measure added 2.2 percent last week.
In China, shares fell, dragging the benchmark index lower for a fourth day. The Shanghai Composite Index dropped 1.5 percent at 2:51 p.m. The yuan fell to 6.3165 per dollar on concern Europe’s crisis will slow Asia’s biggest economy.
In Australia, home-loan approvals rose in November for an eighth straight month as the central bank’s first interest-rate reduction in two years helped attract first-time buyers. The number of loans granted to build or buy houses and apartments gained 1.4 percent, the most since May, after a revised 0.8 percent advance in October, a report showed today.
Yen Strength
Elsewhere in Asia, Japan’s machinery orders rebounded in November from a month earlier by more than economists estimated, signaling the world’s third-largest economy is showing some resilience to the yen’s strength and the global growth slowdown.
India’s inflation slowed to the lowest level in two years, the commerce ministry said in a statement in New Delhi today. The benchmark wholesale-price index rose 7.47 percent in December from a year earlier, compared with a 9.11 percent gain in November. The median of 25 estimates in a Bloomberg News survey was for a 7.4 percent gain.
